Learn more about your company health and how you can do to improve your business’s health.
One of the most crucial aspects for companies in the UK today is to figure out a way to remain resilient.
Through 2021, businesses will face the ever-present prospect of constant changes and uncertainties.
The UK has departed from its membership in the European Union (EU), what should your business do to stay resilient and be capable of negotiating in the coming twelve months?
This checklist of business health to help you tackle the challenges that lie ahead.
Resilience could be an important factor in determining whether a flourishing enterprise and one that is failing.
The capability to rapidly adapt to any interruptions and to continue operating has never been more crucial.
We’ve developed this business health checklist to help your company, regardless of the challenges that could be in store.
Money
The old saying that “cash is the king’ might be old-fashioned however, it’s a fact.
In good times and bad times, your business’ success and survival depends on its cash flow.
A healthy cash balance gives you opportunity and flexibility to weather a weakening market or to take advantage of an opportunity.
Amanda Digne-Malcolm is the Director of Practice with Amanda Digne-Malcolm, Director of Practice at Institute of Chartered Accountants in England and Wales (ICAEW) She shared with us these important insights:
- Keep an eye on your finances: Keep eye check on the bank account each month and schedule regular conversations with an accountant.
- Prepare yourself: Be prepared – prepare for the worst-case and a best-case scenario as well as other scenarios between. Determine the options you have in light of what you know about your current cash situation. Examine the possible positive and negative effects and then address the issues that you have to deal with or make use potential opportunities.
- Get government support: The government has set up a vast array of measures to help small-sized enterprises, ranging from rates relief, VAT exemption, to coronavirus loan scheme and the Future Fund. Talk to your accountant to ensure that you know and get the most of of the support offered.
Support and advice
The most crucial part in building resilience to do it on your own.
Know what you’re best at and what your main offering is, and then seek the best suggestions.
Iain Wright, Director for Business & Industrial Strategy at the ICAEW The ICAEW recommends this method:
Seek expert help
“The one and only essential piece of information I can give to any business confronting or facing challenges is to seek out the advice of a reputable expert at the earliest phase.
“There are a few key players in an organization’s ability to face challenges. an accountant and finance professional should be on top of the list. They will not only assist to plan your business to be sustainable however, they will help you avoid making costly mistakes. The consequences of these mistakes are usually amplified in difficult times.”
Relations with suppliers
The COVID-19 pandemic and the subsequent lockdowns, the necessity for quarantine, and more restrictions on international travel have all had an enormous effect upon the supply chain of numerous UK companies.
Grant Fraser, Global Head of eCommerce Finance at CBILS-accredited lender Woodsford TradeBridge, says that to ensure a robust supply chain in the light of COVID-19, companies must continuously establish new relationships with their suppliers regardless of the difficulties to do so in the short-term.
“These relationships require time to establish, cost a lot of money and are typically are paid at the beginning of establishing the relationships” Fraser says. “However when you diversify your distribution chain you can reduce the risk of supply. It also opens up the possibility to boost sales or production according to the growth in demand, or negotiate better deals with current suppliers.”
Grant also shared these suggestions:
- diversify the supply chain: This ensures that there’s no single point of failure. Learn to analyze your company’s supply chain
- Set up working capital is essential for completing orders and help make the business more flexible.
- Explore your options for financing: such as import financial services, invoice finance factoring, and supply chain finance are all options to help stabilize the balance of your money.
- Get expert advice: It’s helpful to know about funding options as well as the payment terms and effects of deferred VAT on goods purchased in the EU.
Inventing
When necessity has been cited as the source to invention then these times when financial uncertainties are likely to be the source of innovation.
Companies often refer at the rise in tech companies that were founded in the aftermath of the global financial crisis of 2008-2009.
In COVID-19, a lot of companies successfully shifted their normal practices or products to meet the needs in their marketplace.
The pandemic has led to the introduction to the Future Fund, the finance facility designed to assist companies with innovative ideas across the UK.
Its aim is to help support continuous growth and innovation in life sciences, technology, and the creative industries in addition to other industries.
Joanne Whitfield, Fund Director at FW Investments, offers the following tips for businesses with an innovative approach who are looking for investment:
- Get professional advice: These experts along with other business leaders, will help you develop your business concept and create an action plan.
- Connect to the local Enterprise Partnerships: Growth hubs can also be great to provide assistance. The right setting is vital.
- Find financial advice: Connect with an expert in finance to find out about all the assistance that is available to help innovating at the local, regional or national level.
